Five European Startups To Watch

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Editor’s note: Guest contributor Amit Shafrir is president of Badoo, a social network for meeting new people based in London with 130 million users.

Silicon Valley is famously, and rightly, proud of its place as the spiritual home for startups. And it has an inspiring and awesome track record that’s tough to beat.

However, as the recent Le Web conference proved, European tech hubs like London, Berlin and more recently Paris, can now also lay claim to breeding world-class entrepreneurs. There’s a sense that Europe is finally getting its groove on when it comes to startup innovation, and that’s exciting to watch and be a part of. (When even Chanel designer Karl Lagerfeld is getting in on the action, you know that Digital/Tech is having a moment…)

Loic Le Meur’s mission for Le Web—to bring the best of Silicon Valley to Europe—is a laudable one. As Loic says in this TCTV interview, European entrepreneurs are eager to learn from the best and the brightest in the US. And if you look at the headlines from this year’s Le Web, you’ll see the usual bold-faced American names, such as Google, LinkedIn, Foursquare, Twitter, Flipboard, and Instagram.

But hang on a second. Shouldn’t it work the other way around too? Shouldn’t we in the States also look to the European startup renaissance for ideas and inspiration?

After all, some of the most successful start-ups on stage at Le Web weren’t just the Valley wunderkinds, flown over to show the Euros how it’s done. They were the European companies that are innovating in the fields of commerce, lifestyle, and social networking. Not content with just providing local versions of Facebook or LinkedIn, they are creating new businesses for a sophisticated consumer audience. And proving they can be profitable.

With Spotify as a notable exception, there wasn’t a ton of excitement or buzz about those European startups over here. And I have to question why that is. I welcome your thoughts in the comments.

In the meantime, here is my own attempt to try and help redress that balance. Below is my own take on five of the European startups we should be paying closer attention to in 2012:

Social gaming:

Wooga: One of the hottest companies to emerge from the Berlin tech hub, Wooga is Europe’s largest social games developer and the third largest in the world. Wooga recently launched the mobile version of its game Diamond Dash, one of the top 10 social games on Facebook, and hopes to reinvent mobile game app distribution through smarter use of Facebook’s app notifications.

Online Music:

Deezer: Spotify might be making all the headlines over here, and they certainly had a good showing at Le Web this year. But French mobile music-on-demand site Deezer seems intent on giving them a run for their money, announcing their expansion to 130 more countries at Le Web, taking the total to 200 around the world. Interestingly, this doesn’t include plans for the US. Deezer’s CEO, Axel Dauchez, is focused on smartphone users and doesn’t see enough growth happening in the States compared to other countries and territories. However, this decision might be better explained by its competitors’ well-documented struggles with US music labels.

Soundcloud: Headquartered in Berlin, fast becoming a hub for the online music industry and with two Swedish founders, Soundcloud is one of the German capital’s most prominent start-ups. The company is growing at a rapid pace, with over 8 million people creating and sharing sounds across its platform. With its focus on the mobile platform and apps, Soundcloud looks set for an even bigger 2012.

Personal Finance:

Wonga: UK-based short-term online loans company Wonga (the name is a British slang term for cash) is on a tear and looks set to keep growing as the UK economy continues to falter and the need for such a service increases. Wonga closed a massive $117 million round back in February, for further expansion in the UK.

Photo-Sharing:

Eye-Em: Unlike the much-hyped Color, Berlin-based Eye-Em has seemingly found a way to make photo-sharing on your smartphone, well, a smart idea. It’s still early days, but the company is growing fast, and is another one to watch.

This list doesn’t even scratch the surface. I could add other more established names, like Rovio, creator of the hugely successful Angry Birds gaming franchise, or private luxury deals site, Vente Privee.

In short, Europe is no longer just imitating the Valley; it’s creating its own narrative for success. And as innovators and business creators in a global economy, the US entrepreneurial community should be sitting up and taking notice.

Map image by blogdroed.